Japan plunged into political uncertainty after voters deliver dramatic defeat to longtime ruling party

By Helen Regan and Yumi Asada, CNN

(CNN) — Japanese voters delivered a stinging rebuke to the country’s longtime ruling party in elections Sunday, plunging the world’s fourth largest economy into a rare period of political uncertainty.

Japan’s Liberal Democratic Party, which has governed almost continuously since 1955, has lost its parliamentary majority in the powerful lower house for the first time in 15 years.

Public anger and distrust in the government had been growing over rising living costs, inflation and a massive political funding scandal at the heart of the LDP, with voters voicing their discontent at the ballot box.

The LDP and its coalition partner Komeito secured just 215 of the House of Representatives’ 465 seats, short of the 233 needed to reach a majority, according to public broadcaster NHK.

The result is a major blow to freshly minted Prime Minister Shigeru Ishiba, whose gamble to call a snap election to bolster his position after taking office only this month dramatically backfired.

Ishiba said Monday that voters had delivered an “extremely harsh judgement” his party must take “seriously and solemnly,” but also indicated he would not step down as prime minister.

“I myself will also go back to the start and promote severe internal reforms within the party and further drastic reforms regarding the political situation,” he said.

Ishiba said the party did not have a coalition in mind to put forward to govern but it will begin by “discussing each of the party’s policies.”

Elections for Japan’s lower house are usually a foregone conclusion, with the conservative LDP dominating the country’s post-World War II political scene.

Now, it’s unclear who will govern Japan as Ishiba, a former defense minister and political veteran, may struggle to form a government.

Ahead of the elections, the LDP and its junior coalition partner Komeito had a stable majority of 279 seats while the LDP alone had 247. On Sunday, the LDP won just 191 seats – its worst result since 2009, when the party suffered its biggest defeat and was forced to hand control to an opposition party.

To remain in power, the LDP could try and bring other parties into its coalition or rule via a minority government, with both options putting Ishiba’s position as prime minister in jeopardy.

The main opposition Constitutional Democratic Party of Japan (CDPJ) won 148 seats, a significant increase from 98. CDPJ leader Yoshihiko Noda said in a press conference Sunday, “Our goal was to break the ruling party’s majority, and we achieved it, which is a great accomplishment.”

Fresh setback

Before the election, the LDP faced falling approval ratings and public discontent over one of the country’s biggest political scandals in decades. Families and households are facing increased financial burdens, which have been exacerbated by the weak yen, a sluggish economy and high inflation.

The funding scandal involved millions of dollars in undocumented political funds, with some factions in the party accused of paying lawmakers with the proceeds of fundraising sales as kickbacks, or failing to properly declare their income.

Former Prime Minister Fumio Kishida tried to contain the damage by replacing several cabinet ministers and dissolving LDP factions, essentially coalitions within the party. But he faced calls to resign and announced in August that he would not run for a second term.

Ishiba reportedly said he would not officially endorse some party lawmakers caught up in the scandal, but they were allowed to run as independents.

The Prime Minister has also appeared to backtrack on a number of positions since becoming LDP president. He had supported legislation that could allow married women to keep their maiden names, but later said it called for “further discussion,” according to Kyodo News.

As defense minister, Ishiba was strong on deterrence as a security issue. Before the election, he proposed an Asian version of the NATO security bloc, an idea he has apparently dropped after it was rebuffed by the US.

Ishiba has also pledged financial help to low-income households, a higher minimum wage, and regional revitalization, according to Reuters. He promised a “full exit” from Japan’s high inflation rates, vowing to achieve “growth in real wages.”

Japan’s elections come just over a week before the United States votes for a new President. Ishiba has made strengthening Japan’s relations with the US a priority and seeks deeper ties with allies amid growing security challenges in Asia, including an increasingly assertive China and belligerent North Korea.

Partnership with Japan has long been central to US strategy in the Asia-Pacific region, and Ishiba’s predecessor Kishida this year expanded Japan’s defense cooperation with its key ally. Ishiba has called for a more balanced relationship, including having greater oversight of US military bases in Japan, Reuters reported.

On Monday, Ishiba told reporters Japan “will strengthen our ties with the United States even more” and maintain the “extremely good Japan-US relationship and work to strengthen the free and open international order.”

In a political culture that prizes conformity, Ishiba has long been something of an outlier, willing to criticize and go against his own party. That willingness to speak out has made him powerful enemies within the LDP but endeared him to more grassroots members and the public.

Now, the jockeying for power will kick off with all parties seeking alliances to secure enough seats to form a government.

Ishiba and the LDP’s political future is uncertain, and one of the world’s most important economies faces a period of instability until upper house elections next summer.

This story has been updated with additional information.

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